Unplanned Outages Drop China’s Aluminium Production By 0.5 Percent In August

Unplanned Outages Drop China’s Aluminium Production By 0.5 Percent In August

Unplanned aluminum production outages at two of the country’s main smelters helped drop the People’s Republic of China’s total production by 0.5 percent on the month in August according to numbers released yesterday by the National Bureau of Statistics (NBS).

Per Beijing’s numbers, China’s aluminium smelters combined to produce 2.97 million metric tons of primary aluminium last month, down from 2.984 million metric tons in July, China’s second-biggest total on record. Production fell by 0.3 percent on the year, according to NBS.

On a per-day basis, Reuters’ calculations showed an average daily smelting total of 95,800 metric tons last month, off from July’s average daily output of 96,260 metric tons. August’s per-day total was the lowest since March according to Reuters.

Two notable incidents took a toll on August’s production – flooding of Hongqiao’s operations in Shandong from Typhoon Lekima, and an explosion at a Xinfa plant in Xinjiang. In the first instance, Hongqiao’s plant was inundated August 10 and 11, leading to a loss in production of between 200,000 and 300,000 metric tons.

Roughly a week later an explosion at Xinfa’s plant in Xinjiang shuttered a portion of operations at the plant totaling approximately 500 thousand metric tons per annum of production output.

Altogether, the opening 8 months of the year saw Chinese producers smelt 23.47 million metric tons of primary aluminium, better on the year by 1.4 percent. According to experts, higher prices this year account for the rise in production.

However, capacity increases, especially in Yunnan and Guangxi, are not happening as quickly as anticipated. Per CRU’s Jackie Wang, northern smelters are not expected to add to the lurch with mandated cutbacks for the 70th anniversary of the country’s founding, but downstream aluminium processors may feel such a pinch.

“It’s really costly and time-consuming for smelters to shut down and re-open,” Wang noted in comments to Reuters.